Andrew Ferrier

I was just about to diversify my savings into a newly-opened Icesave ISA this evening. Boy, am I glad it took me a while to get round to it.

Now to try and guess analyse the best place for my money.

NatWest have recently introduced a one-time pad device on their on-line banking system, which I’ve just got my hands on. As someone who travels a lot, it’s going to be an inconvenience to carry around, so I phoned up NatWest to see if I could have it disabled. The chap I spoke to implied it was being introduced by all UK banks in one form or another and wasn’t going to be optional. Does anyone know if this is true? I wonder if they have really thought through the implications for their customers. Online banking is often of the most use when you are away from home, and carrying a physical device seems like a very stone-age method of providing security. Why can’t I choose not to have it?

Two recent visits to Wagamama (outstanding noodle bars – give them a try if you haven’t already) have uncovered a strange habit: when asking for the bill, it’s brought immediately to your table, with a slip asking for the tip and a signature. Once this is filled in, your credit card is taken away briefly – presumably to be swiped. But no further signature is required, and even more surprisingly no PIN number is requested. That’s the end of the transaction.

Is this legal? Is it within the terms of the merchant agreement? Is it sensible? Is it secure?

I don’t know, but it’s sure weird. I haven’t seen any other merchant do this.

After writing a few months ago about how bank customers were reneging on the contracts they signed and suing their banks for ‘illegal’ bank charges, it appears that free banking is indeed in danger, with HSBC introducing a monthly fee. I’m glad to see that they won’t be charging them to those account holders with balances greater than £1,500 (read: those who rarely encounter fees anyway), but it’ll still be interesting to see how this shakes up the market. To me, this is a clear example of an unintended consequence of government regulation, in an area that would be better off left alone.

Richard and I went to see Steve Forbes (of Forbes magazine fame) speaking last night at an event organised by The London Junto (a libertarianish organisation). The topic was flat taxes, and Forbes made a compelling argument for one – albeit probably preaching to the converted. Forbes has to be one of the most knowledgeable people I’ve ever seen speak – he dealt with economics, business, and geopolitical questions with equal capability, forthrightness, and clarity. He’s a former Republican presidential candidate, and it’s obvious from his winning politician’s smile. The Lansdowne Club is a traditional old-boys London Club (you can tell this partly because they pointedly use the word criterion on their website), and it made a suitable venue, although it didn’t exactly appeal to my taste. All in all, a worthy experiment.

Just before a trip to London a few days ago, I inserted my Woolwich card in an ATM near Winchester Station. I hit the ‘balance on screen’ button, and saw ‘your card issuer has declined your request’. A bit mysterious. I don’t normally keep much money in that account, but obviously I still wanted to make sure that someone wasn’t in the process of stealing it. So I phoned up the ‘lost and stolen’ line on the back of the card and explained the problem. I was told that, because I wasn’t an Openplan account holder (whatever that is), it wasn’t possible to do any telephone banking past 5.30pm. Although my security details could be verified, I was told that no further information could be given. The card could be cancelled, and a new one sent out, but I didn’t want to go through the hassle for the risk attached to such a small sum of money.

My worries were further compounded when I phoned during office hours the next morning to check again. They could find no record of the card being declined, or an explanation as to why it was. The only suggestion I was offered was: ‘try it in another ATM’. Well, duh.

I’ve no doubt my card will probably work again next time I try it, and this was a one-off glitch. It’s not entirely reassuring that the problem doesn’t seem to have been recorded, but what is surprising is the illogical service I was offered by the Woolwich. This isn’t price discrimination, this is just stupidity: with 24-hour callcentres and computerised records, there is no excuse.

This type of problem in the past has been one of the things that has encouraged me to keep multiple accounts with different banks (so I can get at money when I need it). I suspect the Woolwich might soon lose its place in my portfolio, though. Any recommendations for a replacement?

I’ve just signed up for an account with Zopa, a UK-based peer-to-peer money lending market (for a similar US-based site, see Prosper). It’s going to be a few weeks before I can seed my Zopa account with some capital to lend, but the concept looks absolutely fascinating (as well as potentially lucrative), and I can’t wait to see how well it turns out. It looks like it has the potential to cause some disruption to a part of the financial market in the same way as Paypal did, and I hope it does well. Given the recent news of Muhammad Yunus winning the Nobel Peace Prize for his novel microcredit form of lending, let’s hope that innovation in finance continues, and governments don’t choose to regulate it further.

A train I was on from Winchester to London yesterday was delayed because of faulty doors on another train. In fact, at one point, we actually managed to go backwards for a few miles to get to usable track. Despite sitting stationary for 15 minutes whilst the signalmen dithered and ending up almost half an hour late, South West Trains didn’t mention provide any reparations for passengers on the train. By contrast, my experiments in travelling by coach recently (primarily on National Express) have been very promising; they are cheaper than the train and surprisingly reliable for road-based transport. I shall consider them more seriously in the future as an alternative to the train (I don’t normally drive).

This raises an interesting question; as I understand it, most public transport operators explicitly void any claims for consequential loss as a result of delays, typically in the terms & conditions involved in buying a ticket (although, for example, if you’re taking an air journey in the EU, you are entitled to compensation in some limited circumstances by EU mandate). In other words, if I’m late for a job interview, I can’t sue my train company for possible lost wages, only the ticket price. This is probably because it would increase the price of the ticket substantially if they needed to insure against this. However, sometimes this might be useful – if I miss the play I’m going to at the theatre, all I really need is another train ticket and another theatre ticket for the following night to make it up. If I paid a bit more for my ticket, is this something the train company, airline, or suchlike could provide, at least within certain limits? Could this be an added-value service for 1st class passengers? Or is it a market already well-covered by travel insurance? I’d like to see this service offered, anyway – I for one would buy it on occasion.

It appears that there are increasing numbers of customers revolting against bank charges which they deem as ‘unfair’. It appears that the law states that these charges are indeed illegal, because they cover more than just the costs the banks incur. In other words, banks are not allowed to make a profit on these charges. This is awkward because it artifically distorts the marketplace. It would be useful for banks to put in place high charges to discourage customers from using unauthorised overdrafts, keeping too small a balance for regular transactions, etc. There are already regulations in place ensuring that charges have to be clearly laid out in account terms and conditions, so this isn’t ‘unfair’.

There is also the potential that this may hurt those with the self-discipline to keep our accounts in order. Inside Money hypothesizes that this may result in banks imposing general charges for banking, essentially meaning that those who don’t keep their accounts in order will subsidise those who do. Perhaps it isn’t an area in which it’s healthy for government regulation to intervene. Unfortunately, the law in question here is not specific to banking, but seems to cover contracts in general. I would guess it might be some time before this will change.

One of the things I like to do is keep track of my own personal finances. Knowing how much money you have at any one time, what your debts are (in my case, credit card balances), what your outgoings are, etc., has several advantages:

• You can foresee and more easily overcome cash-flow problems, enabling you to avoid those ‘a bit short this month’ problems.
• You can spot unwelcome trends in your spending patterns, and plan better for the future.
• You have the pleasure of being able to track your wealth growing.

I highly recommend it. Currently I use GnuCash, primarily because it’s the only mature accounting software available for Linux. Quicken and Microsoft Money seem to be viable alternatives for Windows, although you will then have to suffer the treadmill of paid-for upgrades (I used Money until a few years ago, and moved away from it for that reason).